Compensation and incentive systems

The compensation policy for 2009 focused on:

• a stronger integration between MBO and compensation processes and the company’s appraisal system;
• an increase in variable remuneration linked to performance in projects of importance to the company;
• selective measures on fixed remuneration, confirming a merit policy aimed at fostering high-value skills within each professional family.

Short-term incentives continued to be based primarily on management by objectives (MBO), involving about 98% of upper management and about 21% of middle management, as well as a specially designed system of incentives for all sales-related employees.
With regard to medium to long-term incentives, the 2009 Long-Term Incentive (LTI) Plan targets about 400 managers of companies of the Group and uses EBITDA and earnings per share as targets (as in 2007 and 2008, again in 2009, in line with the provisions of the unbundling resolution, 86 senior managers of the Infrastructure and Networks Division have been assigned an LTI plan with specific targets, such as EBITDA for the division and cash cost per customer).